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In
Europe, the focus was on sterling and the UK manufacturing PMI
survey for August, following a run of generally more
upbeat-than-expected data that has taken the edge off concerns
about a sharp decline in economic activity following June's
Brexit vote.
Sterling <GBP=D4> was trading 0.1 percent higher at $1.3150
ahead of the PMI report, due at 0830 GMT and expected to show a
contraction, albeit less sharp than in July.
The dollar index <.DXY>, was flat at 96.050, pulling back from a
three-week peak of 96.255. Against the yen, the dollar was down
0.1 percent at 103.29 yen <JPY=>, having hit a one-month high of
103.540 yen on Wednesday after a slightly stronger-than-expected
ADP Report for August. <ECONUS>
Its rise was tempered after the August Chicago purchasing
managers' index (PMI) fell short of expectations.
"There are still some skeptics who are still not convinced that
the Fed will take action (on rates) again this year," said Antje
Praefcke, currency strategist at Commerzbank. "They have been
misled by the Fed one too many times over the past few months in
their hope for a rapid rate hike cycle following the lift-off."
Praefcke said those investors would have to rethink their
positions and buy the dollar if the U.S. labor market report was
stronger than forecast.
The dollar made significant gains following comments from
Federal Reserve Chair Janet Yellen last Friday at a central
bankers' gathering in Jackson Hole that revived near-term rate
hike prospects.
"The dollar and Treasury yields had risen in tandem following
Jackson Hole last week but that phase came to an end yesterday.
The dollar will not be making much further headway before
Friday's non-farm employment report," said Shin Kadota, chief
Japan FX strategist at Barclays in Tokyo.
The Australian dollar rose after PMI data showed activity in
China's manufacturing sector picked up unexpectedly in August,
albeit modestly. <ECONCN>
The Aussie, often used as a proxy for China-related trades,
edged up 0.3 percent to $0.7540 <AUD=D4> after plumbing a
one-month trough of $.07490 on Wednesday.
(Additional reporting by Shinichi Saoshiro; editing by John
Stonestreet)
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